As someone who takes her cues on net neutrality from Gigaom’s resident expert Stacey Higginbotham or, failing that, John Oliver, this is hard to admit: Mark Cuban may have a point on why the proposed net neutrality regulations may be a cure that’s worse than the disease.

If adopted, he maintained, these regs will open the door to more confusion, more litigation and more overall turmoil, none of which will serve consumers well. Before you throw your device at the wall, just give him a listen. Cuban, the serial entrepreneur who started out as a VAR before founding Broadcast.com which sold to Yahoo in a $5.7 billion stock deal in 1999. He is now owner of the Dallas Mavericks, co-star of Shark Tank and CEO of of AXS TV and interestingly a star of new AT&T commercials. The hyphens just keep coming.

Here’s his gist on net neutrality. He doesn’t think the big bad ISPs have behaved all that badly, or all that differently, than they ever have, so why all the hubbub now?

“It’s not like AT&T and Comcast have recently become super big companies and changed their actions… One of the tenets of net neutrality is that no legal website should be discriminated against. Well, name me one that has been.” He also pretty much dismisses Netflix claims that it in fact faced such discrimination.

He sees competition ramping up in both in wired and wireless access — if these markets are so foreclosed why is Google doing broadband? Why is “AT&T going out of its traditional TV markets where they have U-verse to compete with Comcast and Google? That’s one layer. On the other layer you have mobile, with Cablevision going into Manhattan where Verizon and AT&T have broadband wireless and putting together an unwired wifi network for $30 a month’

His point is that there is competition, although it may not be the competition we would all like to see.

Cuban is clearly worried about one, well two mega players and neither one is a big ISP. “I would rather see national competition for Google than no competition for Google. If you put a lid on Time Warner and Comcast and Google just keeps adding more and more markets, who’s going to compete with them?”

Google and Apple constitute a huge countervailing force for all the ISPs because of their mobile might. “The fastest growing access for Internet is mobile. Who controls access to mobile? Google and Apple. The far greater risk is if Apple decides that the Comcast app is not right, Comcast won’t be able to reach most of its market to give access to its own broadband. Kind of crazy but it’s a possibility.” For the record, he isn’t recommending regulation to stop that either.

His point isn’t that Comcast or Time Warmer or insert-your-least-favorite cable provider here) are so great — he admits they are not — it’s just that the FCC its regulations are ill equipped to deal with fast-changing technologies. The public would be better served to let the cable companies duke it out with each other and, perhaps more to the point, with far scarier competitors including Google and Apple.

He starts about 10 minutes in. But here is the kill shot: Do you really want the same organization (the FCC) that took 8 years to deal with Janet Jackson’s Wardrobe Malfunction at Super Bowl XXXVIII to be the gating factor in the internet? Ummmm, maybe not.

Listen to the whole thing to find out how you, too, can get in touch with Cuban, such a shy and reserved guy, to ask your own questions on net neutrality; whether the NBA is seeing diminishing returns on data analytics; and why the heck the Celtics let the Mavs steal Rajon Rondo. Whatever.

Businessman and TV personality Mark Cuban speaks onstage at TechCrunch Disrupt at Pier 48 on September 8, 2014 in San Francisco, California.

In our intro section, Jonathan Vanian and I discuss all (or a bunch anyway) of this week’s Kubernetes news — where Mirantis was latest into the pool, working with Google to bring the cluster management framework to OpenStack clouds, joining HP and a raft of other tech vendors endorsing the open-source framework. Interestingly, Spotify blazed its own trail, Helios as opposed to Kubernetes for its own workloads.

]]>HBO CTO Otto Berkes quit his job Tuesday after news broke that the cable network is outsourcing the development of its online streaming service, which is set to debut next spring.

HBO had announced in October that it wants to go directly to consumers in 2015, selling them a new streaming service that wouldn’t be part of a traditional cable bundle and would more closely competes with Netflix’s video service. At the time, many assumed that the service would be based on HBO Go, the network’s existing TV Everywhere service for cable subscribers.

However, Fortune reported Tuesday that HBO’s leadership decided to outsource the development of the service to MLBAM instead. The Major League Baseball subsidiary already powers streaming services for WWE and Glenn Beck’s The Blaze network as well MLB’s own streaming service. Executives didn’t have confidence in Berkes and his team to pull off the launch of HBO’s forthcoming streaming service, according to the report.

It didn’t take long for Berkes to respond; Variety relayed news of his exit just hours after the original report came out. The industry publication quoted a memo sent out by Berkes, which reads in part:

“This is a change in direction from what I planned with HBO and the approach will not utilize my overall capabilities. Therefore, I feel that this is the right time for me to move on from HBO.”

]]>Shane Smith, the colorful co-founder and CEO of Vice Media, has gotten the multibillion-dollar market valuation he wanted for his upstart new-media conglomerate — but not from Time Warner, with whom he had reportedly been in negotiations. Those talks have been shelved, reports say, and now Vice has confirmed to the Financial Times that it is selling a 10-percent stake in the company to A&E Networks (a joint venture between Disney and Hearst Co.) for $250 million, which pegs the entire company’s market value at $2.5 billion.

“It’s a great deal for us,” Smith told the Financial Times. “It means we can preserve our independence and it gives us a war chest for another three years of dramatic growth.” Although Smith said that Vice is exploring the possibility of having its own channel, for the moment it will be producing programming for the network, which runs shows such as Duck Dynasty and Storage Wars.

Until recently, Vice had been in acquisition talks with Time Warner over a deal that would have reportedly valued the company at about $2 billion. According to a number of reports, those talks — which would have given the new-media entity control over the HLN network — are now finished. The New York Times says the talks collapsed after the companies couldn’t agree on a valuation.

The A&E acquisition gives Vice a dramatically larger market value than it had just a year ago: last August, the company sold a 5-per-cent stake to Rupert Murdoch’s 21st Century Fox for $70 million, giving Vice an implied market value of $1.4 billion.

]]>When companies go public, it’s supposed to be a joyous occasion, with much cheering by investors and bright hopes for the future, as the CEO rings the bell at the NYSE. In the case of the newly-public Time Inc., however, the bell sounded more like the one that tolls during a funeral: after all, the legendary publisher is weighed down with debt, and most of its properties seem to be pulling up the rear digitally rather than blazing new trails. What does the future look like?

A New York Times piece does a good job of cataloguing Time Inc.’s challenges: For one thing, former parent Time Warner saddled the new company with $1.3 billion in debt, which means it is already behind the eight ball financially. According to the Times, the new entity has to cut its editorial costs by a massive 25 percent in order to have any hope of keeping its head above water. As the NYT story puts it: “Skeptics have suggested the spinoff is more akin to a burial at sea.”

Time Inc. was once a shining symbol of everything that was glorious about American magazine publishing, as Michael Wolff described recently — a place where executives in wood-panelled suites ate from fine china, and handed down editorial decrees from on high — but it has been downsized fairly dramatically already. How on earth is it now supposed to cut editorial costs by more than 25 percent? Cutting your way to profitability is a lot harder than it sounds.

Although the New York Times story doesn’t mention it, the challenge that Time Inc. faces is very similar to the one the Times itself is struggling with: namely, to get from a world in which print still produces the vast majority of profits — but is shrinking rapidly — to one where digital comes first. The NYT just produced a whole “innovation report” about it, and it doesn’t contain any magic bullets.

As the Columbia Journalism Review notes, the Timescan’t just stop printing the newspaper, even though it accounts for a huge proportion of the company’s costs, because it also generates an equally vast percentage of the NYT’s revenue. Similarly for Time Inc., going all-digital in one fell swoop — or “burning the boats,” as venture investor Marc Andreessen put it a number of years ago — isn’t a realistic option at this point, especially as a public company.

Obviously, it would have helped if both Time and the Times had started to try and make this transition a long time ago (like, say, a decade ago) when it became apparent to many that the web was going to trigger a massive, tectonic shift in the way media behaves. But both decided to wait — or to make tiny, incremental changes — and the reason for that revolves around the number one thing that both media giants need to figure out:

1) The culture:

Management guru Peter Drucker once said that “culture eats strategy for breakfast,” and you can see the effects of that throughout the New York Times innovation report, and in the aftermath of its publication. Digital advocates both inside and outside the NYT say they have repeatedly made the kinds of recommendations contained in the report, and failed to have much effect. This is a central part of Clay Christensen’s Innovator’s Dilemma: the inability to change even when the need to change has become blindingly obvious.

How does Time Inc. (or the NYT) solve this problem? The first step is to choose editorial and business leaders who understand the digital world, and aren’t tied to the cultural procedures of the print world. The NYT has a challenge in that department because its new executive editor is very much a product of the print culture at the newspaper. And who has Time chosen for a similar role? Joseph Ripp, longtime chief financial officer of Time Warner. As Dan Primack put it in a somewhat ironic post at the newFortune website:

Here’s the bear case: Time Inc. may not actually know how to innovate, or at least not how to do it at scale. After all, it’s pretty tough to flip the switch when those mental muscles have been atrophied after more than a decade of being told “No, don’t spend money on that.”

2) The platform:

Time Inc. has a whole series of powerful brands, from People magazine (which produces a staggering $1.4 billion or so in annual revenue) to Fortune and Sports Illustrated. But like much of the rest of the industry, the company’s approach to digital mostly consists of bulky websites with content shovelled online from the print version, or “mobile” apps that amount to photographs of the print product, with little or no sign that anyone knows how content behaves online.

For a glimpse of how the future might work, Time needs to look at digital-native players like BuzzFeed, or better yet, Gawker Media. Much like the magazine giant, Nick Denton’s Gawker is a series of vertical brands devoted to specific topics — Deadspin for sports, Kotaku for games, Jezebel for women’s issues, and so on. What does Denton know that Time doesn’t? Mostly it’s how content functions now. As Ken Doctor notes in a post at the Nieman Journalism Lab, Vox Media also looks a lot like a new digital-first version of Time Inc.

What do Eater, Curbed, Racked, Polygon, SBNation, The Verge, and the new Ezra Klein Vox have to do with each other, other than a common platform and synergistic sales? Not much. Yet, without the legacy burdens, the tortured history — and the $400 million in cash flow — Vox simply wants to become the next-gen Time Inc.

3) The business:

In his piece at Fortune, Dan Primack tries to make the case that even though it is saddled with debt and its innovative muscles have likely atrophied, Time Inc. has a chance to shine because it is no longer being used as a piggy back by its corporate parent, and so it can plow whatever profits it generates into reinventing its assets. But it’s going to take more than some snazzy website redesigns to do this — Time Inc. has to rethink not just what it looks like, but what the purpose of a “magazine” is in a world of real-time information and social distribution.

That could mean taking some cues from Forbes, which has reinvented itself as an online platform (although not everyone likes the result, and the publication is struggling to find a buyer) or from the Atlantic, which has had some success with new ventures like Quartz and The Wire. Is there any appetite at Time Inc. for — or even awareness of — what that kind of innovation involves? That’s not clear.

The bottom line is that if that kind of thinking doesn’t exist at Time Inc., the company had better find a way to get some, or it’s financial future is going to make Newsweek‘s financial implosion look like a day at the beach.

]]>Confessional letters from former FCC commissioners are fairly rare at the best of times, but it’s even more unusual to get one from a former regulator who blames himself for some of the damage that has been done to the media industry in the United States via mega-mergers. That’s pretty much what former commissioner Michael J. Copps does in an open letter he wrote that was published at the Columbia Journalism Review site on Thursday.

Copps, who was sworn in as a Federal Communications Commission board member in 2001, says in the letter that he had a “front-row seat watching government policy undermine your profession and our democracy” for more than a decade. Based on some of the FCC’s decisions, Copps says that he “saw first-hand how my agency’s decisions limited your ability to accomplish good things.” He goes on to say that thanks to the FCC’s desire to approve almost any merger deal:

“Gone are hundreds of once-independent broadcast outlets. In their stead is a truncated list of nationwide, homogenized, and de-journalized empires that respond more to quarterly reports than to the information needs of citizens.”

Not surprisingly, the recently-announced $45B merger of Comcast and Time Warner Cable helped spark Copps’ thoughts in this regard, since it will result in a media behemoth that not only controls a huge chunk of the U.S. market for cable but will also have unprecedented control over the kinds of content that subscribers can access via its internet pipes.

Deals cut the muscle out of newsrooms

Copps says the sales pitch of media giants who bought and merged properties was often that there would be “synergies” and “economies of scale” that would make the resulting company more efficient. But what that translated into, he said, were massive layoffs in the media:

“Everywhere I looked, I saw newsrooms like yours being shuttered or drastically downsized, reporters getting the axe, and investigative journalism hanging by the most slender of threads. Instead of expanding news, the conglomerates cut the muscle out of deep-dive reporting and disinvested in you.”

It wasn’t just broadcast, the former FCC commissioner says — the FCC made things worse for newspaper journalism as well, by making it easier for large media companies to own both broadcast outlets and newspaper chains. “It was disheartening to realize how government — my own agency — was an accomplice in diminishing our news and disfiguring your journalism,” he says.

Copps also says he doesn’t buy the argument that the internet or new-media startups can take on much of the work that traditional newsrooms used to do, because “only a few have managed to find an online model to support the resource-intensive journalism that has been so drastically diminished in traditional media.” Perhaps in the future they might, but not now, he says.

The former commissioner argues that one of the things his former agency needs to do is to ensure a free and open internet by enshrining “net neutrality” principles in law, after they were struck down by a recent court decision. And he says the United States — and the media in particular — need to spark a national debate on the future of the internet, so that the people can make their voices heard.

]]>Late Wednesday night, word leaked that Comcast was planning to make a friendly bid for fellow cable company Time Warner, and on Thursday morning that deal was confirmed with an announcement from the companies involved. In case you are trying to get up to speed on what the impact of the deal might be and whether it is likely to succeed, here’s a rundown of the major points:

What’s happening?

Comcast describes the deal in this way: “The agreement is a friendly, stock-for-stock transaction in which Comcast will acquire 100 percent of Time Warner Cable’s 284.9 million shares outstanding for shares of CMCSA amounting to approximately $45.2 billion in equity value. Each Time Warner Cable share will be exchanged for 2.875 shares of CMCSA, equal to Time Warner Cable shareholders owning approximately 23 percent of Comcast’s common stock.”

“You can see broadband is not only a much faster growing business, it also has higher gross margins and comes with much fewer headaches — such as paying through the nose for programming. Broadband also comes with one more thing — a virtual monopoly.”

Stacey described the problem with this kind of merger in a post last year: “So the cable industry, if it can consolidate, gets access to the most important pipe coming into people’s homes (after power and water) and the fewer cable companies there are, the more unified the rate structure might appear.”

How is Comcast pitching this deal?

Comcast says the transaction “creates multiple pro-consumer and pro-competitive benefits, including for small and medium-sized businesses,” and adds that through the merger, “more American consumers will benefit from technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi.” It says it will also be “better able to offer advanced services like high-performance point-to-point and multi-point Ethernet services and cloud-based managed services to enterprises.”

As Laura noted in a post at Gigaom, Comcast is essentially arguing that the existence of broadband competitors such as Google Fiber, and of net-based content producers like Netflix and Hulu (of which Comcast is a co-owner), justifies the government approving this deal:

“In today’s market, with national telephone and satellite competitors growing substantially, with Google having launched its 1 GB Google Fiber offering in a number of markets across the country, and consumers having more choice of pay TV providers than ever before, Comcast believes that there can be no justification for denying the company the additional scale that will help it compete more effectively.”

Does the deal raise red flags?

Some argue that the combination of two large cable companies isn’t something to be concerned about, since their networks don’t overlap and therefore they don’t compete anyway. As Peter Kafka at Re/code puts it:

“Here’s the big idea that’s supposed to get the deal approved in the coming months: It’s okay for a giant cable company to buy another giant cable company, because cable companies don’t compete. Assuming the deal goes through, it’s not going to reduce my (limited) choices. I’m just going to start writing checks to Comcast instead.”

Comcast and TWC aren’t competitors. It’s not good to consolidate ownership, but it doesn’t reduce choice. They were already cartel partners.

In the New Yorker, writer Ken Auletta argues that the merger is really a sign of how weak Comcast and Time Warner are, thanks in part to cord cutting and the internet: “Nearly everyone hates ‘the cable guy,’ as the TV ad proclaims. They hate him for his perceived power. Yet these days, the cable guy — or the people he works for, in any case — is more vulnerable than ever.” Profit margins are plummeting, says Auletta, and new platforms like Netflix are gaining subscribers. “Comcast may be the strongest cable guy of them all, but even with Time Warner Cable in its possession, it’s still vulnerable.”

@mokoyfman industry consolidation is highly correlated with the dawn of the next thing. Google Fiber and fiber to the home is coming

A columnist at Forbesmakes a similar point, saying: “Nonsensically, everyone is reporting this as a merger between “the two largest cable companies” as if that kind of scaremongering makes it seem akin to the deal where AT&T tried to buy T-Mobile (combining the first and fourth largest mobile carriers). But in the real world, you never choose between Time Warner and Comcast, since they don’t have any overlapping markets.”

What are critics of the deal saying?

Susan Crawford, a professor in intellectual property at Harvard Law School and a fellow at the Roosevelt Institute, says in a post at Bloomberg View that the deal is “bad for America.” The reason it is scary, she says is that “for the vast majority of businesses in 19 of the 20 largest metropolitan areas in the country, their only choice for a high-capacity wired connection will be Comcast.” If regulators don’t want to stop the merger, she argues, then they should allow regions and municipalities to build their own alternative fiber networks.

“We can’t allow our future to be captured by the short-term cash flow desires of Comcast’s investors. We’re all the people of Fort Lee, New Jersey, trying to get on the George Washington Bridge. There’s a bully narrowing our access to the world whose interests aren’t aligned with ours. What we need is for that bridge to be maintained, for traffic to flow and for the bully to get punched in the nose.”

I wonder if net neutrality would be more popular if legislation was named the "Stop Comcast Act of 2014"

Craig Aaron of Free Press says the deal would give Comcast “control of more than a third of the U.S. pay-TV market and more than half of the U.S. triple-play market for video, voice and Internet service,” giving it what he calls “unprecedented market power over consumers and an unprecedented ability to exert its influence over any channels or businesses that want to reach Comcast’s customers.”

“No one woke up this morning wishing their cable company was bigger or had more control over what they could watch or download. But that — along with higher bills — is the reality they’ll face tomorrow unless the Department of Justice and the FCC do their jobs and block this merger. Stopping this kind of deal is exactly why we have antitrust laws.”

This is just an outgrowth of the FCC's failure to foster local competition years ago. That battle lost, we ended up w/ regional monopolies.

At The Verge, Bryan Bishop says that Comcast’s purchase of Time Warner Cable “would essentially rip away the already perishingly tiny hope of new competition ever emerging in the cable landscape, taking what’s been a constant frustration for consumers and cementing it into a permanent state of affairs.”

Stacey pointed out in 2012 all the ways in which Comcast has been stifling new internet-based services, including by throttling peer-to-peer traffic, using data caps and other methods: “This market has incredible distortions thanks to a variety of ownership structures, business models and how much control they have over the deliver of content into the home. And no one has more power and is taking as active a stance in this business as Comcast.”

There are 83M US broadband subscribers. $CMCSA = 20.6M. $TWC = 11.5M. Post merger, Comcast will control nearly 40 percent of US broadband.

What are regulators likely to do?

Obviously, as the WSJ points out, this deal is going to spark substantial regulatory debate, despite the fact that the two companies’ cable networks don’t have a lot of overlap. Gene Kimmelman, chief executive of Public Knowledge and a former official with the Justice Department’s antitrust division, said: “This transaction is dangerous for broadband competition and would likely inflate consumer prices. Antitrust officials and regulators need to scrutinize this deal carefully and prevent harm to consumers and the competitive process.”

FCC’s cable ownership rules were struck down in 2009 so that wouldn’t be problem for Comcast-TW, but deal will still face lotsa scrutiny.

Comcast is promoting the deal as positive in part because it has committed to honoring its net neutrality agreement with the FCC — and says it will extend that to Time Warner’s network — even though the rules governing net neutrality were effectively suspended with a recent court ruling. One concern about the combined entity will be whether it will have too much leverage over content providers: last year, Time Warner subscribers in New York and other markets lost access to CBS programming during a dispute over access fees.

Jeff took a look at the regulatory aspects of the proposed deal in a post here at Gigaom, in which he points out that the merger will be subject to review by both the FCC — which will try to determine whether it is in “the public interest” — and by the Justice Department, which will be looking at antitrust regulations.

What are the odds the deal goes ahead?

Some argue that earlier decisions by the FCC show that the agency doesn’t have the stomach to deny a company like Comcast, and so will likely force some concessions or agreements and leave it at that. Allen Grunes, an antitrust lawyer with GeyerGorey LLP, told the Wall Street Journal: “There’s very little political will right now in the U.S. to keep pipes and content separate, or to limit the national reach of a cable company like Comcast. My guess is that if Comcast is able to make some serious and enforceable commitments to the FCC, the deal will go through.” Others aren’t so sure, however:

To me, apparent lack of break-up fee suggests that Comcast/TWC think there is a good chance of regulatory failure

Stacey says that even though the combination of the two giant companies would be a “bad idea for consumers, innovation and even U.S. broadband,” it is also likely to go through: “Legislative decisions made decades ago to ensure broadband competition have made the Comcast deal today feel almost inevitable. The big question now is what will the government do to ensure the nation keeps forging ahead with better broadband, innovative services and happy consumers.”

Peter Weber at The Week, however, doesn’t think the deal has a hope of being approved, saying: “The deal isn’t going to happen. Not in any recognizable form. I don’t know if Comcast really thinks this deal will sail through, or if it’s just trying to scuttle the efforts by Charter to buy Time Warner. But someone in the Obama administration will surely stop this train. My money’s on Wheeler.”

Are there any benefits to the proposed deal?

The Verge says there is one possible benefit to a merger: “A cable company with true nationwide reach could cut the kind of deal that would change that, providing enough subscribers to make a next-generation TV product viable and create enough market pressure to bring its competitors to the table and sign on to similar arrangements. It’s the kind of deal that could turn a new Apple TV into a set-top box that would let you watch live television.”

StockTwits founder Howard Lindzon, meanwhile, says one beneficiary of such a deal would be Google, since it would suddenly look a whole lot less scary and monopolistic by comparison: “Google is the story tomorrow. The Comcast/Time Warner deal only raises the evil tolerance ceiling for Google. That’s still the real long term problem for Cable.” For more on who the potential winners and losers from the deal are, check out this post from Stacey.

Bingo. Former FCC head Reed Hundt says on CNBC that "broadband consolidation" should be a major regulatory concern in the Comcast deal.

]]>The future of TV is a hotly debated topic. And while consumption of TV content has increased (Nielsen reports that the average American watches almost 34 hours each week) in many ways TV has resisted many of the technology revolutions that transformed other industries. These include the Internet, the advent of mobile and social and the “UI/UX is everything paradigm shift.” With newcomers like Google, Apple and even Intel now looking to disrupt the status quo, how can we try to model the future?

What if I said, “Just look to your pocket”? The evolution of television parallels another industry in an eerie way: the mobile phone evolution. Hear me out:

In the early days of mobile (which was not so long ago), various device manufacturers (HTC, Motorola, Nokia) and service providers (AT&T, Verizon) tried to develop their own ecosystems around their brands. Fragmentation was the name of the game: mobile developers had to develop in Symbian, Java, Windows Mobile and Brew, and customize apps for different screen sizes, device features and even carriers. The carriers tried to “own” the customer and sell additional services and content, using clunky technology like WAP. This was the world before iOS (and later Android) came in to create a simpler ecosystem for developers and a great user experience for the customer.

This isn’t so different from television today: We see device manufacturers sell “connected TVs” that run their own proprietary OSes with their own customized app stores. The MSOs or multiple service operators (the operators of cable or satellite television systems), like the wireless carriers of the past, try to own the customer through “TV Everywhere” solutions that tend to be subpar. It’s unlikely that these solutions will hold in the long run.

The complexity of content

The true future of TV—a meaningful revolution—will require the integration of a great user experience with painless access to content. We’ve seen it happen before, when Apple changed the music industry with the IPod, and again when it changed the mobile industry with the iPhone (the apps were the content), and one might argue that Google did the same thing for web content and Facebook for personal content. However it’s not so easy to do that with television for the following reasons:

TV content is extremely difficult to access: Six companies (Disney, Viacom, Time Warner, News Corp, CBS and Comcast) control 90 percent of American media. These content owners refuse to sell content a-la-carte and force the despicable pay-TV bundles.

Obtaining content rights is extremely complicated and expensive: For example, ESPN pockets $6 per cable subscriber, regardless of whether they watch sports, which adds up to $7.2 billion a year. Even tech giants like Google and Apple will struggle to pay such amounts annually (especially as a non-R&D spend.)

Creating original content isn’t easy. It’s hit driven, it’s expensive (which explains why the less-costly reality shows and talk shows rule the airwaves), and it is built one show at a time. And, while we’ve seen quality programming developed by Netflix, Amazon, and YouTube they simply can’t compete on volume.

So how will change come about? It will happen when the content owners are forced to break their existing profitable model. This will only happen when enough people abandon expensive pay TV bundles to watch content online (a behavior termed “cord cutting”) and advertisers stop paying obscene amounts for TV ads.

For cord cutting to become mainstream there needs to be a surge of quality content available outside of pay TV (This is not happening yet: while Netflix and Hulu are doing well, pay TV subscriptions are not declining.)

Simultaneously, the bundling of pay TV with broadband Internet would need to be less attractive (this bundling is controlled by the MSOs who own “the last mile.”) But something will trigger it. With music the trigger was the transition from discs to MP3s and the rapid rise in piracy that allowed Apple to innovate. But the important takeaway from the iPod revolution is the reminder that when these changes do happen, they happen fast.

Consumers and MSOs will win

Ultimately everything will unify around a limited number of new underlying platforms that will serve both the UI as well as the content. These platforms will be closely integrated with mobile devices, so Google and Apple (and maybe Amazon or Microsoft) are well positioned to play—and someone will certainly win. The MSOs will go the way of the telecom carriers and become delivery pipes. There’s no need to feel sorry for the MSOs, though: Unlike mobile carriers their geography-based monopolies will mean they enjoy a larger share of the pie.

And consumers will win. It may take some time, but eventually they will have easy access to compelling content rolled into an amazing user experience.

]]>That Comcast deal that gives you broadband internet and HBO for $40? Time Warner CEO Jeff Bewkes isn’t stressing out about it. Bewkes told analysts during Wednesday’s earnings call that the offering is pretty limited, according to Deadline.com, adding that it won’t be attractive to most people.

Last week, news emerged that Comcast has started to offer an Internet Plus bundle, promising consumers 25 MB broadband, access to HBO and a small bundle of local TV channels for $40 a month for a one-year promotional period, after which the price would go up to $70 a month.

Bewkes said Wednesday that this kind of limited bundle may be appealing to some, but that most pay TV bundles still include Time Warner channels like TNT, TBS and CNN, which are responsible for 80 percent of the company’s cable network revenue.

Bewkes could be right about the limited appeal of Comcast’s offering, in part because it may look better on paper than it really is: The folks over at the Verge decided to call up Comcast’s customer service to actually get the deal, and they were told that they also had to pay $17 in rental and HD fees, plus additional taxes and fees, which likely brings the whole price to a little more than $60 per month.

The Verge also called up a number of other cable operators, and found that getting HBO and broadband is still very hard, with salespeople regularly pitching more expensive packages and making odd claims about broadband speeds necessary to stream video. In other words: Even if you don’t want the full cable bundle, you’re still gonna get the cable sales experience.